State how each of the following items is reflected in the financial statements. (a) Change from FIFO to LIFO method for inventory valuation purposes. (b) Charge for failure to record depreciation in a previous period. (c) Litigation won in current year, related to prior period. QUESTIONS Questions 1383 (d) Change in the realizability of certain receivables. (e) Write-off of receivables. (f) Change from the percentage-of-completion to the completed-contract method for reporting net income.
Chapter 21 – Accounting for Leases A lease is a contractual agreement between a lessor and a lessee. This arrangement gives the lessee the right to use specific property, owned by the lessor, for a specified period of time. In return for the use of the property, the lessee makes rental payments over the lease term to the lessor. Who are the lessors that own this property o They generally fall into one of three categories: 1. Banks. They have low-cost funds, which give them the advantage of being able to purchase assets at less cost than their competitors. Banks have been more aggressive in the leasing markets.